Outgames organizers have 'no regrets' over $5.3-million deficit

Montreal Outgames organizers remained unapologetic yesterday,
despite ringing up a deficit the provincial government estimates to
be $5.3 million.

By The Gazette (Montreal)November 14, 2006

Montreal Outgames organizers remained unapologetic yesterday, despite ringing up a deficit the provincial government estimates to be $5.3 million.

"There are no regrets about the games," Marielle Dupere, co-chairperson with former Olympic swimmer Mark Tewksbury, said yesterday. "Montreal needs this kind of international event to position itself in the market."

Dupere said the Outgames owes only $2.2 million to its suppliers, however. The rest of the $5.3-million deficit is largely government loans.

Dupere blamed the Quebec government for botching organizers' efforts to pay their bills.

Quebec covered the fees for the use of some big-ticket venues, like the Palais des congres and the Olympic Stadium, rather than hand over cash to the Outgames to settle part of every bill owing, she said.

"The small suppliers that helped us will be penalized by this action," Dupere said.

She also criticized Municipal Affairs Minister Nathalie Normandeau for talking to the media about the Outgames' financial shortcomings.

"We had an agreement with Quebec that we were not supposed to talk with the media," Dupere said.

Jonathan Trudeau, Normandeau's spokesperson, confirmed yesterday Quebec has forgiven a $1.4 million line of credit extended to the Montreal Outgames to help the event pay off its other creditors and suppliers.

But the bailout still leaves Outgames organizers $3.5 million in debt to the city of Montreal, Tourism Montreal and the business community, Trudeau said.

Montreal Mayor Gerald Tremblay might have to say goodbye to the $1 million line of credit the city advanced to the Outgames this summer, city spokesperson Bernard Larin said.

What's worse, he added, is that the city cannot recover money advanced to event organizers by claiming a cut of government sales taxes.

"Major events create economic spinoffs, but that money does not end up in the city coffers."

Montreal also provided the Outgames with $2.5 million in goods and services, in the form of equipment, staff and venues, Larin said.

The inaugural World Outgames, held in Montreal July 26 to Aug. 5, brought more than 12,000 participants from around the world to compete in sporting events, attend cultural activities and take part in a human rights conference.

While organizers always insisted the event would pay for itself, they sent out a financial distress call a week before opening day, Trudeau said.

"They said they had a short- term cash flow problem that could jeopardize the event," he said.

"That's why the government got involved. Imagine the impact on Montreal's reputation if the event were cancelled at the last minute."

Organizers assured the Quebec government the Outgames would eventually show a $200,000 surplus, Trudeau added.

When a provincial government comptroller checked the books in September, the surplus had become a hefty deficit,

Trudeau said.

"Organizers will have to explain how they could go from a surplus of $200,000 to a deficit of $5.3 million," he said.

The Outgames' final report is expected this month.

Included in the deficit is $800,000 still owed to the Outgames from sponsors and sales tax returns, Trudeau noted.

If the $800,000 shows up, "we hope they will use that money to honour their commitments to suppliers," Trudeau said.

Tourism Montreal is among the Outgames' creditors, Trudeau said. The tourism office gave the Outgames a $500,000 subsidy as well as a $500,000 line of credit, he said.

"It remains to be seen whether they will forgive the loan."

Dupere said the Outgames were delivered "as planned, and on budget."

A lack of public support, and the competing Gay Games in Chicago July 15 to 22, spoiled things, she said.

Organizers were able to sell only 3,000 tickets - as part of a two-for-one special - of the 35,000 tickets available for the final ceremonies, Dupere said.

Dupere said she hopes to meet with Normandeau this week to resolve the deficit issue.

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